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“As largely foreshadowed, English increased the Government’s spending allowance in Budget 2016 for the 2016/17 year to NZ$1.6 billion from NZ$1.0 billion to accommodate extra spending on health and education because of population growth, and includes money spent up front on child welfare reforms.”

Hickey’s suggestion that “English increased the Government’s spending allowance in Budget 2016 for the 2016/17 year to NZ$1.6 billion from NZ$1.0 billion to accommodate extra spending on health and education because of population growth“ seems at variance with the Finance Minister’s own denial that his Budget was predicated in any way on a per-capita basis.

On 28 May, on TV3’s ‘The Nation‘, Bill English was interviewed by Lisa Owen;

Lisa Owen: “… I just want to be clear on this, because if you look at the figures, let’s say for health, a variety of economists say that we needed about 700 million a year just to keep pace, yet health is getting about 570 million a year. You’ve frozen the schools’ operational budgets, so to be absolutely clear, per capita spending on health and education, it’s down, isn’t it?”

Bill English: “No. Look, I couldn’t say for sure whether it’s up or down. It’s probably about the same. The point I’m making is it’s the wrong measure. The measures that matter are the ones that are about focusing on getting results.”

Lisa Owen: “Shouldn’t you know whether it’s up or down in terms of spending per capita? Because that’s something that our viewers will want to know.”

Bill English: “It’s not a measure we apply… Now, per capita, I can’t tell you whether it’s up or down.”

To be fair on Hickey, he wrote his story prior to English’s comments, which were two days later.

At least now we all know that English does not factor-in per-capita data in his Budgetary calculations. He was categorical in his assertion.

No, he obviously uses more precise techniques…

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Yet, English himself has readily admitted that yes, he does factor in population (aka “per capita”) in his Budgetary considerations;

“Strong population growth is both an indicator of New Zealand’s economic performance and a contributor to it,” English told the parliament in his Budget address. “For the first time in a generation, we have a net annual movement of people into New Zealand from Australia, rather than an exodus of Kiwis across the Tasman.” – Bill English, 26 May 2016

And,

“Some spending previously earmarked for Budget 2017 has been brought forward, so net new operating spending in Budget 2016 has increased to $1.6 billion per year. This recognises pressures from higher population growth, and opportunities to invest in core public services and economic initiatives.” – Bill English, 26 May 2016

And the clincher;

“Spending pressures have changed since the last Budget – in part because higher-than-expected population growth has increased demand for public services… District Health Boards will receive $1.6 billion over four years to invest in services, meet population growth and deliver better results.” – Bill English, 26 May 2016

English’s own words reveal that he wilfully misled Lisa Owen on 28 May, on ‘The Nation‘. Unfortunately, fact-checking politicians who spin untruths is not easy, and requires quick-thinking and an encyclopedic memory.

Only in retrospect can we fact-check politicians’ statements and determine how honest they have been with the public.

*1: I have downloaded and retained a copy of the National Party webpage. In the past, National Party webpages tend to “disappear”, and are no longer searchable, making referencing and verification of quotes problematic. If this webpage disappears, English’s comments can still be verified to anyone requesting it. – Frank Macskasy

“One of the obvious ways to overcome these problems is to make New Zealand a bigger country with bigger companies. We need a national debate on population policy and how big we should be by 2060.

Once grown, the challenge is then keeping these companies in New Zealand so the country benefits from them. The alternative is selling out to other countries and losing talent overseas for better jobs and better pay.”

The NZIER suggested a population of 15 million for New Zealand, by 2060 .

“We need to ensure existing capability-enhancing policies are delivering value for money. Our immigration, tax, welfare and foreign investment policies need to enhance rather than restrict the ability of New Zealand firms to gain scale.

On-going efforts to cut less vital spending like Working for Families and interest-free student loans will ease the pressure on the kiwi dollar. Public spending has acted like a tax on the export sector.”

Leaving aside the issue of migration for a moment, the question that demands an answer is: do these people actually think through issues before making public pronouncements?

Because reading their comments and thinking through the issues to inevitable conclusions leads this blogger to conclude that NZEIR and ExportNZ indulge in superficial thinking and short-term, easy “solutions”.

For starters, what would be the consequences of a population of 15 million people?

This country already suffers from the following;

175,000 unemployed.

How does adding ten and a half million people help address those already jobless?

More pollution.

I think most of us know by now that our “100% Pure” and “Clean and Green” reputation is now mostly a fiction to rival that of elves, goblins, hobbits, pixies, Easter bunny, Little Red Riding Hood, Mickey Mouse, et al.

As our population has increased, so has housing affordability and availability worsened. Housing was more affordable fourty years ago and young New Zealanders are having to migrate to Australia to buy a home of their own.

The damage caused to our expanding tourism industry would most likely outweigh any benefits accrued from an increase in exports.

Third and last contention; trebling our population seems a simplistic and hopelessly lazy “solution” to a problem that appears more rooted in other factors such as National’s blind obedience to neo-liberal policies, and it’s refusal to address the high value of our dollar.

It seems bizarre that ExportNZ has wandered off on some weird tangeant, and ignored the real problems affecting exporters. It’s almost as if Ms Beard; her colleagues; and NZIER, have experienced a collective – dare I say it – brain fade.

If this is the best that our business leaders can come up with, then I despair for our country.

There has been considerable commentary made by Labour’s critics and political opponents that Labour was an incompetant economic manager, during their nine year term in office. The reality, though, is somewhat different. There are many things that Labour did well and some not-so-well.

But the records speaks for itself.

The following is data, in the form of easily understandable graphs, from Trading Economics, an American website. They collect data from the IMF, World Bank, Statistics NZ, the Reserve Bank of NZ, etc, (the usual motley crew of subversive, left wing organisations) to compile their finished presentations.

Each category will be presented via two graphs. Eg,

“New Zealand GDP Growth Rate”

Graph 1: 2000 – 2011

Graph 2: 1990 – 2011

National was in power from 1990 to the end of 1999.

Labour governed from the beginning of 2000 to the end of 2008.

National took office After November 2008.

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New Zealand Population 1960 - 2011

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New Zealand Unemployment Rate

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New Zealand Unemployment Rate 2000 - 2011

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New Zealand Unemployment Rate 1990 - 2011

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Long-term unemployment (% of total unemployment) in New Zealand

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Some politicians use long-term unemployed as an election weapon, to win electoral support. However, despite their mis-use of the facts and figures, long-term unemployment was dropping in the last ten years. Not that certain politicians would admit it, though.

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Long Term Unemployment (% of Total Unemployment) in NZ 2000 - 2008

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Note how long-term unemployment rose in the late 1980s and spiked in the early to mid 1990s. Can we remember what happened to New Zealand in that time? The terms “Rogernomics” and “Ruthanasia” might jog our memories.

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Long Term Unemployment (% of Total Unemployment) in NZ 1990 - 2008

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New Zealand Employment

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New Zealand Employment 2000 - 2010

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New Zealand Employment 1990 - 2010

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New Zealand Government Debt To GDP

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Despite claims that Labour “spent up large” during their nine year term, the truth is completely different. As the IMF data shows with crystal clarity, Labour paid down debt. It was not until National came to office that debt levels took of again.

It could be said, with considerable truth, that Finance Minister Michael Cullen ran the government accounts with a fiscal discipline that would make Scrooge sit up and take notice.

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New Zealand Government Debt To GDP 2000 - 2011

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The IMF data shows fairly well why Labour had such massive debt kevels to pay down. It was an inheritance from the previous Bolger-led National Government of the 1990s. (Though National were addressing that debt, the reduction slowed from 1997 onward.)

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New Zealand Government Debt To GDP 1990 - 2011

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New Zealand GDP

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One of the many “charges” made by neo-liberals against the Labour Party is that centre-left governments are poor stewards of the economy and are anti-business. Yet, the World Bank data below shows quite dramatically how well New Zealand’s economy fared in the 2000s. Our growth was such that a common complaint from business was a lack of skilled, experienced staff.

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New Zealand GDP 2000 - 2010

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The early 1990s were marked by “Ruthanasia” – a continuance of Roger Douglas’s extremist neo-liberal, free market policies. All socio-economic indicators worsened during Ruth Richardson’s tenure as Minister of Finance. The World Bank data below shows how New Zealand’s economy was practically crippled under the tender mercies of the New Right.

It was not till 2003, under Labour’s governance, that the economy began to grow.

As an aside, there were took tax cuts during the 1990s. Result: minimal benefit for the economy.

Labour increased taxes for top income earners in the early 2000s. Except for a short-term ‘dip’, the tax rise doesn’t seem to have impacted on the economy.

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New Zealand GDP 1990 - 2010

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New Zealand GDP per capita

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New Zealand GDP per capita 2000 - 2009

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New Zealand GDP per capita 1990 - 2009

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New Zealand Interest Rates

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New Zealand Interest Rates 2000 - 2011

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New Zealand Interest Rates 1990 - 2011

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New Zealand Inflation Rates

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New Zealand Inflation Rate 2000 - 2011

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New Zealand Inflation Rate 1990 - 2011

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New Zealand Current Account

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This is the bit which shows how much we sell overseas (export), compared to what we buy (import). Exports can be wool, timber, fish, dairy products, company profits, etc. Imports can be fuel, consumer products, vehicles, raw materials, heavy machinary, etc. The shaded gray should be above the ‘O’ line, instead of below it.

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NZ Current Account 2000 - 2011

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NZ Current Account 1990 - 2011

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New Zealand Government Budget

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This graph is an interesting bit. When John Key and Bill English refer to the previous Labour government expanding State expenditure, this is what they are referring to. And they are correct – but only half correct. As per usual, they are telling you only half the truth – and leaving out the next, important bit.

Look at the next graph below, 1990 – 2000.

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New Zealand Government Budget 2000 - 2011

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In the graph below, it is clear that the National government from the early to mid 1990s (commonly referred to as “Ruthanasia”) and in the late 1990s, consistantly cut back on expenditure. Some of you may recall horror stories of those times; ex psych patients living rough, in toilets, with no State-community support; market housing rentals; and hospital waiting lists far longer than anything we have today.

On 3 April 1998, Southland dairy farmer Colin Morrison (42) died on a waiting list, awaiting a triple heart bypass surgery. In death, Mr Morrison symbolised everything that was terribly wrong with the health system in the late 1990s. Public anger mounted as an unpopular government seemed unable to respond to concerns that our public services were being run down in the name of “efficiency”.

Little wonder that there was a 11.55% swing toward Labour in the 1999 General election – the electorate had had a gutsful of neoliberal policies resulting in growing inequality and social problems that seemingly went unheeded. Contrasts

That is the reason why Labour spent so much during it’s term: to make up for the lack of social spending in the 1990s, and to meet growing public clamour for social services to be better resourced.

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New Zealand Government Budget 1990 - 2011

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Cash surplus/deficit (% of GDP) in New Zealand

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Contrary to the fantasies of some history-revisionists, trying to paint the previous Labour Government as “bankrupting the country”, Cullen actually posted some fairly respectable surpluses.

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Cash surplus-deficit (percent of GDP) in New Zealand

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New Zealand Sovereign Credit Ratings

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The following data-sheet shows New Zealand’s credit downgrades from 1977, when Rob Muldoon was Prime Minister, to the present.

Note that three credit downgrades happened duting three National governments; 1991, 1998, and this year. And if you include the Rogernomics period – that makes FOUR neo-liberal governments that were downgraded.

Do credit ratings agencies seem “risk averse” to new right governments? Do they prefer centre-left governments?

New Zealand Prison Population trend since 1980

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The prison sentenced population demonstrates continuous and steady growth since 1986. The seasonal pattern of reduced numbers toward the end of each year is well established, and reflects the influence of the prisoner Christmas release policy 1 , as well as cycles of activity involving Police and the Courts. Notable is the sharp upturn in numbers which commenced in mid-2003, continuing through to June 2007.

A closer look at the period 1962 to 1996. Note the huge ‘spike’ in the prison population from 1986 onwards. Except for occassional dips, the prison population has continued to rise steadily since the mid-1980s.

It cannot be a coincidence that New Zealand’s entire socio-economic fabric was unravelled and “reformed” in a process commonly referred to as “Rogernomics”. The process of “economic reform” continued into the 1990s, referred to as “Ruthanasia”, up until 1996.

The prison population, though, continued to rise.

The ongoing effects of “Rogernomics/Ruthansia” are ongoing to the present day.